Yield Stays Strong Despite Rising Rates

Despite the climb in short-term interest rates, credit card issuers have been able to preserve their portfolio yields via the variable nature of interest rate terms. During April, the average portfolio yield, which includes interest and fee income, approached 19% rising 90 basis points from the prior month and 154 basis points from one-year ago. Although there is usually a 30-day to 60-day lag in implementing a new variable rate, fee income continues to be a significant component to yield. According to FitchRatings, the prime portfolio yield among credit card-backed bonds in April was 18.81%, compared to 17.91% in March and 17.27% one-year ago.

ABS HISTORICAL
Prime Rate Yield
Nov 7.00% 17.89%
Dec 7.25% 17.26%
Jan 7.50% 17.96%
Feb 7.50% 17.56%
Mar 7.75% 17.91%
Apr 7.75% 18.81%
Source: FitchRatings

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Chelsea Football Launches Chip & PIN Card

The Chelsea Football Club has partnered with 3C International and Dione
to create the “Xtreme” terminals for bar and hotel applications and
mobile “Xplorer” terminals for payment at the table. The Club needed to
implement an integrated, EMV “Chip & PIN”
compliant card payment system to service all areas of the leisure
center. The terminals were all connected into a central payment
application resident on a business-wide server, providing a fully
integrated payment solution with full resilience powered by 3C “Integra”
software to all areas of the business. 3C International is a card
payment processing company. Dione, a fully owned subsidiary of
Lipman Electronic Engineering, is a supplier of secure “Chip & PIN”
smart card payment terminals and managed services.

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Yodlee and Equifax UK Launch Account Watch

Yodlee and Equifax have teamed up to create “Account Watch” to help
consumers proactively manage their financial accounts and protect
themselves from fraud and identity theft. “Account Watch”, available
from Equifax UK, leverages Yodlee’s “OnCenter Alerts Service” to monitor
real-time online account activity, such as bank accounts, savings
accounts and credit card transactions and automatically sends consumers
alerts of any unusual or suspicious activity. It is estimated that more than 100,000 people are affected by identity theft in the UK each year, costing the British economy over GBP 1.7 billion annually

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SEC Scrutinizes Tier Technologies

VA-based Tier Technologies has been subpoenaed by the Philadelphia District Office of the SEC requesting documents relating to financial reporting and personnel issues. Tier says it intends to cooperate fully in this investigation. Last week Tier confirmed that James Weaver has resigned as Chairman and CEO. The decision followed a recommendation by the audit committee of the board of directors that Weaver’s employment be terminated. Tier provides information technology solutions and through its Official Payments Corp. subsidiary.

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Overstock.com Deploys AuctionCheckout

Salt Lake City-based Overstock.com Auctions has fully integrated San Diego-based AuctionCheckout.com’s online payment service. After a seller enrolls in and is approved for AuctionCheckout.com, all of that seller’s listings will display the secure payment link “O-Auctions Checkout”, which speeds winning bidders through a simple checkout with no fees or registration requirements. After completing the transaction, sellers automatically receive funds into their checking account, usually within 2-3 days. AuctionCheckout.com is a provider of payment services specializing in credit card transactions for online marketplaces.

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ABS 1Q/06

Charge-offs for credit card-backed bonds in the U.K. continued to
deteriorate during the first quarter, hitting a record 6.7%, compared to
4.7% one-year ago and 5.8% for the prior quarter. Delinquencies also
edged upward during 1Q/06 to 3.6% compared to 3.3% in the prior quarter.
According to FitchRatings, there were significant rises in charge-off
levels in virtually all trusts across the quarter with the exception of
Pillar Funding. A common observation among originators is that the
increased charge-offs are more the result of higher balances being
charged-off rather than more customers defaulting. Originators are using
a variety of strategies to limit the losses by introducing more
proactive account management policies. Meanwhile, the monthly payment
rate on credit card ABS soared in the first quarter to 19.5%, compared
to 15.9% for the fourth quarter. The Fitch “Yield Index” stood at 20.8%
at the end of 1Q/06, rising from 19.3% at the end of December 2005.

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Fiserv to Promote PBT’s ATM Direct

San Francisco-based Pay By Touch announced the first EFT network to offer the company’s Internet PIN debit transactions. Fiserv’s ACCEL/Exchange EFT Network will participate in the initial market promotion to raise awareness of the new ATM Direct service. ATM Direct is a software-only solution. ACCEL/Exchange has more than 80 million cards, 500,000 merchant locations, 100,000 ATM locations and 3,500 member financial institutions in the USA. To date, Pay By Touch services over 154,000 retail clients, manages personalized rewards programs for more than 130 million opt-in consumers and has more than 2.3 million shoppers using biometric authentication products and services at 2,000+ locations coast to coast.

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QuickBooks and Storefront Integrate

Homestead Technologies has integrated Intuit’s “QuickBooks Merchant Service for Web Stores” with its “Storefront” ecommerce solution for small business. This integration enables business owners to accept credit card payments online with a QuickBooks Merchant Service account and synchronize this data along with key business data from the Web store directly with QuickBooks. Homestead Storefront helps small business owners get up and running fast, by providing a powerful and affordable ecommerce solution that allows them to build, manage and host their own websites.

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